Key Europe indexes rise on heels of Japan's Nikkei

Tuesday

Feb 19, 2013 at 12:01 AM

Japanese market surge is felt overseas.

JAMEY KEATEN

PARIS — Europe's main stock market indexes nosed higher on Monday as investors cautiously contemplated a further fall in value for the Japanese yen, which sent the benchmark Nikkei index surging more than 2 percent.

Traders also digested the lack of criticism of Japan at a weekend meeting of Group of 20 finance ministers. Japanese Prime Minister Shinzo Abe has introduced measures that would have the effect of driving down the yen in a bid to help manufacturers. A lack of G20 criticism for Abe's economic policy appeared to give him a freer hand to pursue Japan's efforts to jolt its manufacturing sector.

Earlier, Germany's central bank said Europe's biggest economy was on track to avoid a recession amid signs of growth in the first three months of the year. The German economy shrank 0.6 percent in the fourth quarter of 2012. The European Central Bank predicts the eurozone economy will shrink 0.3 percent in 2013 and only start to recover later this year.

Also Monday, French Finance Minister Pierre Moscovici said he is sticking to the goal to cut France's state budget deficit to 3 percent of economic output by year-end. France, which officially still expects growth of 0.8 percent this year, has taken deficit-reduction measures.

But the state auditor cautioned last week that the level could in fact rise to 4.5 percent.

Moscovici, speaking to reporters in Paris, said he didn't believe France's credibility would be hurt if "something exceptional intervened" that could possibly scale back the deficit reduction target. Shares of mining giant Anglo-American skidded 2.9 percent to 19.80 pence in London after police in South Africa said several people were shot and injured as miners from rival unions clashed at one of its platinum mines.

Earlier, many eyes in Asia were on Japan, where the Nikkei 225 index in Tokyo surged 2.1 percent to close at 11,407.87. Australia's S&P/ASX 200 rose 0.6 percent to 5,063.40. South Korea's Kospi was marginally higher at 1,981.91.

The dollar and euro resumed their rise against the Japanese currency. The U.S. greenback fetched 93.96 yen, up 0.46 yen, and the euro also gained 0.46 yen, to 125.43 yen.

Last week, the yen fell to a near three-year low against the dollar and the euro. The yen has been steadily declining since December because of expectations that Japan's central bank would take action resulting in a weakening of the yen.

Benchmark oil for March delivery was down 20 cents to $95.65 per barrel in electronic trading on the New York Mercantile Exchange. The contract closed at $95.86 a barrel on the Nymex on Friday.